George Chamberlin's Money in the Morning

Could it be the Santa Claus rally began yesterday? Thanks to rumors of progress in the negotiations to deal with the "F.C." -- as I like to call it, stock prices took off late in the session and the Dow Industrials finished up 100 points and have advanced in six of the past nine trading days. The index is now 6.5 percent away from an all-time high set on Oct. 9, 2007 at 14,164. Who knows, a legitimate solution to the budget mess back in Washington could provide the spark to a big rally that would take the markets to new highs, probably in early 2013. Then again, they could blow it and let the economy fall off the cliff.

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The buzz out of Washington is that the Obama team has agreed to keep current tax rates in place for U.S. households with earnings below $400,000. That is a big concession from the much-discussed level of $250,000 Obama seemed locked into. Reports this morning have Speaker Boehner preparing a bill to raise taxes on higher earners with corresponding spending cuts.

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The new Legoland Hotel in Carlsbad is now scheduled to open on April 5, well ahead of the original schedule. No, the three-story, 250-room resort hotel is not made out of Lego bricks but they will definitely be in evidence throughout the facility with more than 3,400 models on display using more than 3 million Lego bricks. The hotel rooms will be family friendly including two separate sleeping areas, one for grown-ups and one for up to three children.

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The confidence of America's homebuilders has climbed to the highest level since April 2006. That's according to the latest report from the National Association of Home Builders, which reported confidence rose this month for the eighth consecutive month. "Builders across the country are reporting some of the best sales conditions they've seen in more than five years, with more serious buyers coming forward and a shrinking number of vacant and foreclosed properties on the market," said Barry Ruttenberg, chairman of the NAHB.

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At the same time, RE/MAX is reporting home sales rose 15.7 percent in November compared to the same month in 2011. "If we can get more reasonable regulation from Washington and if mortgage availability improves, 2013 will see a much stronger housing market," said CEO Margaret Kelly.

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I've never heard of this guy but I sure like what he says. SteenJakobsen, chief economist as Saxo Bank -- a Danish financial company -- is looking for a big drop in oil and gold prices in 2013. "U.S. crude oil production continues to rise through advanced production techniques and with domestic inventory levels already at 30-year highs combined with limited export options, oil prices come under renewed selling pressure," said Jakobsen, who sees oil down to $50 a barrel next year. As for gold, "The strong U.S. economic recovery surprises the market and especially gold investors, which flee the traditional safe haven investment." He sees gold falling from its current level of around $1,700 an ounce to $1,200.

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It is reported McDonald's is asking its franchise operators to keep their restaurants open on Christmas day. It's a pretty simple idea: some 93 million people will be traveling that day and will likely need to eat while they are on the road. The company did the same thing on Thanksgiving and it wound up saving the month of November with sales coming in well above expectations. You wonder if the media will make a big deal out of this the way they did when Target and Wal-Mart decided to open their stores Thanksgiving evening. Again, that proved to be a huge success for the retailers. Wal-Mart reported bigger sales that day than Black Friday, traditionally the busiest shopping day of the year.

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Americans are not going to make personal finance a resolution this New Year. A report from Allianz Life finds 84 percent of people surveyed say they will not include financial planning in their resolutions for 2013. The main excuse for not making a money resolution: "Don't make enough to worry about it." For the second year in a row "health/wellness" topped the list as the most important focus area for the coming year.

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One of the most surprising financial stories of 2012 has been the amazing decline in interest rates. Few thought they could fall much further after plunging in 2011. Consider this: The yield on yesterday’s two-year Treasury note auction was an anemic 0.245 percent. That's not even a quarter of 1 percent. After taxes and inflation you wind up with a negative rate of return. Yet, the Treasury sold $35 billion worth of the notes. Go figure.

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